Group Assignment Cover Sheet: Student Details
Group Assignment Cover Sheet: Student Details
STUDENT DETAILS
DECLARATION
Admittedly, society doesn't exist without an economy, and businesses frame the global financial
2
system. On top of that, every enterprise requires an adequate leader who converges many factors:
integrity, accountability, empathy, humility. As Judy Green et al. mentioned in "The Effects of Goal
Orientation and Client Feedback on the Adaptive Behaviors of Family Enterprise Advisors" that
advisors play a vital role within family enterprises. Moreover, those entrepreneurs are always ready
to tackle financial risks within the hope of profit and increasing the possibilities of prosperity.
Though entrepreneurship is the overall process of developing, launching, and running a business, it is
argued that there are many alternative varieties of entrepreneurship. Although forming family
businesses is assumed to be the foremost effective way to gain prosperity, there are still several
drawbacks of forming a family corporation. There are many advantages that family enterprise brings,
such as saving time in finding investment, creating a stable situation in the marketplace, having a
specific reputation. However, the leadership cannot be denied that family conflict will occur and
manage less creatively rather than one member companies. the advantages and disadvantages that
family enterprises arouse are put considerately in four spheres: Commitment and unified leadership;
the ingenuity of the subsequent generation requirements to satisfy the conditions of success;
disagreement between members of the family may directly threaten the external footstep and family
bias issues.
Running a successful business, especially a family enterprise, mainly depends on the way
individuals illustrate their commitment and the unification in choosing a well-behaved leader.
Firstly, it cannot be denied that the word "loyalty" or "commitment" refers to a goal that is crucial in
sustaining a relationship, it has been defined widely in marketing literature (Oliver, 1999; Schakett,
2010), and it is perceived to be the most important element and target in relationship marketing
(Sheth and Parvatiyar, 2002). In the relationship marketing literature, commitment has been defined
by Morgan and Hunt (1994) as the recognized estimation that a financial institution would terminate
the relationship with another firm in the relatively near future. In marketing, customer-supplier
relationship refers to a connected and long-term collaboration with complexity (Håkansson, 1987).
For instance, Berry and Parasuraman (1988) states in a service marketing context that “relationships
3
are built on the foundation of mutual commitment”. Moorman et al. (1999) referred to commitment
as “an enduring desire to maintain a valued relationship”. Thus, Berry and Parasuraman (1991)
maintain that mutual commitment is based on which relationships develop. The other vital part of
running a firm bases on the choose of an effective leadership who has been recognized as a key
businesses, amateur and professional activities, religious communities, and military assets (Judge &
Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996; Northouse, 2007). Furthermore, there is
strong indication that transformational leadership has resulted in crucial individual-level outcomes
like employee engagement, motivation, and job success, as well as organizational-level outcomes
like business performance (Barling, Weber, & Kelloway, 1996; Bono & Judge, 2004; Bycio,
Hackett, & Allen, 1995). Hence, the extant research provides reasonably strong support for the
theoretical predictions derived from the MLT (cf., House & Shamir, 1993; Howell & Avolio, 1993;
Future generation involvement has been one of the pillars of family business survival and
development. In the article "Taking the Pulse of Family Business”, Perman (2006) stated that many
family businesses will face a change of ownership over the next ten years because of the retirement
of the previous generations and the younger generation's explosive growth generation. The next
generation could make a significant contribution when it comes to identifying and reducing
disruptive threats as well as harnessing emerging technologies. One of the most distinguishing
characteristics of a family business has always been its ‘long-term' mindset – family businesses think
in generations, not quarters. The EY Global Family Business Survey (2018) indicates that most
family enterprises used internal accumulations and family-own capital for business growth as well as
innovation. This illustrates that the next-generations are willing to invest and persevere with a strong
sense of conviction, without relying heavily on outside capital or expecting immediate results. This
long-term dedication aids family business owners in dealing with difficult circumstances, and it can
and innovating to effectively run their company. In many ways, the next-generations have been at the
forefront of disrupting the standards and establishing new ones. Several have ventured into industries
that are vastly different from their traditional family businesses and are now effective leaders in
those fields. However, the successors' 'price' for joining and running a family company may include
giving up career opportunities that are financially and personally appealing. A new family member
entering a family business may appear to be losing his or her privacy. Moreover, when their
management styles clash, there may be some conflicts between parents and children. A company
might make compromises, such as rewarding members of the family who chose to enter or remain in
the family business. In a word, potential next-generation seems to contribute to the success of a
family enterprise.
Running families in business do have plenty of benefits in personal and market areas, yet business
owners often encounter several difficulties among family members in the company. Empirical
research and anecdotal evidence both suggest that numerous crashes in these businesses can be
traced to personal disputes within family members (University of Auckland Business Review, 2013).
Family conflict is one of the unavoidable cases which affects businesses negatively. There are many
reasons for creating fights in a family business: negative emotion, rivalry or succession. In the article
“How to Run a Family Business”, Christine Lagorio stated that one of the most challenging aspects
honesty, clear and non-secret about any concerns in the company, thus, poor communication leads to
dissenting opinions, controversy, and misunderstanding about the company’s decisions. On the other
hand, the participation of family members in the management of family groups promotes biased
situations. In the article "Why damaging nepotism persists in family businesses" by Warwick
Business School (2015) web statistics that 70% of the family business is on the verge of bankruptcy.
Family group leaders often consider empowerment to the next generation as the safest measure, Dr
Eubanks (2015) said. Ignoring the qualifications and abilities of family members is often the best
5
option because of the stereotypes that outsiders can threaten the growth of the family group and
endanger your status. That has been listed by Keith G.Baldwin, covering wages and hours issues up
to complaints of discrimination, harassment, and unfair labor practices. Raising salaries and
promotions has created a very comfortable environment but will make family members become
extravagant and authoritarian. One of the risks when hiring relatives in the company is that they may
break the working rules, which other employees dare not do. According to Kayla Sloan (2017),
violating company rules for family members is normal behavior, although not intentionally, having a
family relationship that prevents the binding of discipline. Consequence will cause conflicts between
employees; families and other employees because the inequality leads to a negative impact on the
control the business model. Mainly, the leadership is a cohesive unity with an appropriate business
organization for the family businesses and unqualified loyalty. These beneficial outcomes make the
owner gain success quickly, and the next generation who has the opportunity to practice good
governance is a significant factor in determining whether the company has a strong foothold or not.
Besides some drawbacks, the positive impact of a family enterprise is tremendous, with the
established corporation and a fine foothold, the remaining factor is about the management, as the
world changes are counted on second so that entrepreneurs must get a progressive spirit to assist
Reference List
B. Hargis, M., Piotrowski, C., & D.Watt, J. (2011). Developing Leaders:Examining the Role of
Transactional and Transformational Leadership Across Business Context. Organization
Development Journal, 29(3), 51–66. Retrieved from
6
https://www.researchgate.net/publication/288137219_Developing_laders_Examining_the_role_of_tr
ansactional_and_transformational_leadership_across_business_contexts
Christine, L. (2011, October 8). “How to Run a Family Business” Inc. Retrieved from
www.inc.com/guides/running-family-business.html.
Davis, W. D., Dibrell, C., Craig, J. B., & Green, J. (2013). The effects of goal orientation and client
feedback on the adaptive behaviors of family enterprise advisors. Family Business Review, 26(3),
215-234. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/0894486513484351
Dr. Eubanks .(2015, September 22).Why damaging nepotism persists in family businesses.Warwick
Business School. Retrieved from https://www.wbs.ac.uk/news/why-damaging-nepotism-persists-in-
family-businesses/
Duerden, A. (2018, March 5). Global family business to make immediate headcount increases and
technology investments in response to disruption. London, GB. Retrieved from
https://www.ey.com/en_gl/news/2018/03/global-family-businesses-to-make-immediate-head-count-
increases-and-technology-investments-in-response-to-disruption#:~:text=The%20EY%20survey
%20points%20out,increases%20of%20greater%20than%205%25.&text=%E2%80%9CIt%27s
%20good%20news%20for%20the,change%20into%202018%20and%20beyond
Giddings, B., Hopwood, B., & O'brien, G. (2002). Environment, economy and society: fitting them
together into sustainable development. Sustainable development, 10(4),187-196. Retrieved from
https://download.clib.psu.ac.th/datawebclib/e_resource/trial_database/WileyInterScienceCD/pdf/SD/
SD_4.pdf
Hamid, A. B. B. A., Ebrahimpour, A., Roghanian, P., & Gheysari, H. (2011). Commitment and
Customer Loyalty in Business-To-Business Context. European Journal of Business and
Management, 10(10), 1–11. Retrieved from
https://www.academia.edu/4377697/Commitment_and_Customer_Loyalty_in_Business_To_Busines
7
s_Context
Keith, G.B (2019, October 22). The Four Biggest Challenges for Family-Owned Businesses.Davis
Wright Tremaine. Retrieved from https://www.dwt.com/blogs/family-business-resource-
center/2019/10/four-family-business-challenges
Perman, S. (2006, February 14). Taking the Pulse of Family Business. Retrieved from
https://www.bloomberg.com/news/articles/2006-02-13/taking-the-pulse-of-family-
businessbusinessweek-business-news-stock-market-and-financial-advice
Sloan, K. (2017, June 14). Pros and Cons of Running a “Family Business”. Retrieved from
https://due.com/blog/pros-cons-running-family-business/.